How do you draft a special needs trust?

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Drafting a special needs trust involves appointing a trustee, funding the trust and stipulating how the trust money should be spent, according to Bankrate. An alternative to a private special needs trust is a pooled or community trust, which combines and invests contributions from those with modest incomes, states Nolo.

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Special needs trusts are set up to provide extra income that does not jeopardize eligibility for Medicaid or Supplementary Security Income benefits for those with disabilities, states Nolo. Often family members make the best trustees, but when there is no suitable relative, a professional trustee is usually appointed, according to Bankrate. Pooled trusts are commonly handled by nonprofit organizations. The trustee manages the trust and distributes the trust's assets for the well-being of its beneficiary. Sometimes the trustee needs to hire an accountant to handle tax returns and a financial advisor to deal with investments.

The trust lasts for the lifetime of the beneficiary or until its funds are exhausted, says Nolo. The trust's assets are used to provide the beneficiary with extra medical expenses, physical rehabilitation and personal care attendants. The trust funds can also be used for education, recreation, home furnishings and vacations. Supplementary Security Income and Medicaid personnel monitor special needs trust expenditures to verify that they meet the needs of the beneficiary, as reported by Bankrate. The creator of the trust can attach a letter of intent with any specific instructions on how the assets should be used.